The United States and Iran have reached a tentative agreement to extend their existing ceasefire by 60 days and initiate further negotiations regarding Tehran's nuclear program, according to a source familiar with the matter. This development raises hopes that the three-month-long conflict may be approaching a resolution.
Details of the Agreement
The source, who spoke on condition of anonymity due to the sensitive nature of the talks, confirmed an earlier report by Axios. U.S. President Donald Trump has yet to formally approve the terms. Both nations have previously expressed optimism, with Trump frequently indicating that the U.S. was close to securing a deal, only for the standoff to persist.
Vice President JD Vance told reporters on Thursday that the U.S. and Iran are "going back and forth on a couple of language points," particularly concerning Tehran's nuclear capabilities. He noted that Iran appears to be negotiating in good faith and that progress is being made.
Iranian Perspective
Iran's semi-official Tasnim news agency reported on X that the text of a potential memorandum of understanding between the two countries has not been finalized, citing an unidentified source. Fada-Hossein Maleki, an Iranian lawmaker and member of the parliamentary commission for national security, stated that negotiations have shown "significant progress," according to the semi-official Iranian Students' News Agency (ISNA). Maleki added that the U.S. still must decide whether to accept several Iranian conditions, though he did not elaborate.
U.S. Conditions and Red Lines
U.S. Treasury Secretary Scott Bessent declined to confirm whether an interim deal had been reached, stating only that negotiations continue. He reiterated Trump's three "red lines" as prerequisites for any agreement: reopening the Strait of Hormuz, Iran surrendering highly enriched uranium, and ending its nuclear program.
The U.S.-Iran memorandum of understanding would guarantee unrestricted shipping through the Strait of Hormuz, according to Axios. Iran would be required to remove all mines from the strait within 30 days. Bessent also noted that Oman has no plans to impose tolls on shipments through the waterway, having received assurances from the Omani ambassador.
Recent Clashes and Truce Violations
The fragile truce, in place since early April, has been punctuated by isolated military strikes. Axios reported that Trump asked for "a couple of days" to consider the agreement. This followed overnight clashes between the U.S. and Iran, with each side accusing the other of violating the ceasefire.
U.S. forces shot down four Iranian drones fired at a commercial ship and struck a launch unit near the Strait of Hormuz, according to a U.S. official, who described the strikes as defensive and stated that the ceasefire remains intact. Iran responded by targeting the U.S. base from which the attack originated, as reported by state-run Press TV on X.
Market Reactions
The MSCI All Country World Index, a broad measure of global equities, rose 0.3% to an all-time high, as easing tensions fueled expectations for lower oil prices and stronger economic growth. Brent crude dropped 0.6% to about US$93.10 per barrel on Friday.
